While the publication remains relatively consistent with the one published last year, updates have been made on the topics of board skills matrices, director continuing education, human capital management and succession planning, board and management diversity and executive share ownership requirements.

In this year’s publication, CCGG has highlighted a share ownership policy where the requirements are expressed as a multiple of an executive officer’s long-term incentive plan (LTIP) target, as opposed to the common practice of using base salary. CCGG has stated that benchmarking ownership relative to total direct compensation or the annual LTIP target may be more meaningful than base salary if base salary is the smallest component of total direct compensation.

Access the annual review on CCGG’s website.

The U.S. Attorney General’s determination of whether disclosure of a material cybersecurity incident qualifies for a delay will be based on whether such disclosure “poses a substantial risk to public safety and national security.” The SEC must be notified of the determination of the Department of Justice (DOJ) in writing. If a registrant’s request is approved, the DOJ will communicate its decision to the SEC in addition to informing the registrant so that it can delay its Form 8-K filing.

Form 6-K will be amended to require foreign private issuers to furnish information on material cybersecurity incidents that they make or are required to make public or otherwise disclose in a foreign jurisdiction to any stock exchange or to security holders. Form 20-F will be amended to require that foreign private issuers make periodic disclosure comparable to that required in new Regulation S-K Item 106.

The SEC also issued several new compliance and disclosure interpretations (C&DIs) that address additional considerations for registrants that are requesting a delay from disclosing a material incident.

Access the final rule on SEC’s website and the guide on FBI’s website

The Passport Process comprises of three steps:

• Step 1 – Pre-File Letter and Meeting
• Step 2 – Passport Application
• Step 3 – TSXV Review

The goal of the Passport Listing Process is to identify advanced new listing applicants, provide them with greater certainty, accelerate their listing and capital-raising timelines and reduce costs associated with the listing process. Applicants seeking to list on the TSXV pursuant to the Passport Listing Process benefit from greater access to TSXV staff and expedited reviews.

All application materials and due diligence must be substantially completed at an early stage. Following submission of the required documentation, the TSXV commences its review on an expedited basis and provides an initial comment letter within five to seven business days. Passport Listing Process applicants can expect regular meetings with the TSXV to discuss comments and the status of their application.

Review the process on the TSX website.

The IASB had issued IFRS 6 Exploration for and Evaluation of Mineral Resources in December 2004 because of a project taken over from the IASC.

Based on evidence collected, the IASB concluded at its September 2023 meeting that there is no compelling evidence that standard-setting would be necessary.

The IASB acknowledged that diverse accounting policies for exploration and evaluation expenditure would continue to be used in practice. However, feedback from investors and other users of financial statements suggested that those diverse accounting policies were not a significant concern.

Overall, the research findings suggested that any improvements to financial reporting that might result from amending or replacing the requirements in IFRS 6 or other IFRS Accounting Standards are likely to be outweighed by the costs of developing and implementing any such changes.

Review the press release and the project summary on the IFRS Foundation website.

The ISA for LCE is a standalone global auditing standard designed specifically for smaller and less complex businesses and organizations. Built on the foundation of the International Standards on Auditing (ISAs), audits performed using this standard provide the same level of assurance for eligible audits: reasonable assurance. The standard is effective for audits beginning on or after December 15, 2025, for jurisdictions that adopt or permit its use.

Released alongside the ISA for LCE are a Basis for Conclusions, which details feedback from the public consultation period, a high-level fact sheet, and a frequently asked questions document. Additional materials to help jurisdictions navigate adoption will be issued in 2024, including supplementary guidance, a fact sheet on adoption, and a first-time implementation guide.

In May 2023, in its comment letter to the IAASB, the Auditing and Assurance Standards Board (AASB) indicated that it will continue to monitor and provide input to the IAASB as it works towards providing solutions in this area.

Review the materials  and the comment letter on the IAASB website.

Gary’s recent warnings against "AI Washing" underscore the rapid evolution of AI and its potential implications on corporate behavior, particularly within the realms of corporate and securities litigation. In a speech before an AI industry group, Gensler emphasized the importance of accurate and fair descriptions of AI-related processes, cautioning against misleading investors.

He also discussed the challenges of assessing AI-related litigation risks and explores concerns regarding the financial services industry's adoption of AI tools and potential impacts on decision-making processes, highlighting the broader legal principles that apply in the context of emerging technologies like AI.

Access the article on The D&O Diary’s website

• New item: IAS 37 Provisions, Contingent Liabilities and Contingent Assets — Climate-related Commitment
• New item: IFRS 8 Operating Segments — Disclosure of Revenues and Expenses for Reportable Segments
• Finalization of agenda decision: IAS 27 Separate Financial Statements — Merger between a Parent and Its Subsidiary in the Separate Financial Statements
• Input to IASB project: Climate-related and Other Uncertainties in the Financial Statements
• Input to IASB project: Provisions —Targeted Improvements
• Input to IASB project: Power Purchase Agreements

Review the meeting highlights on the IFRS website.

Mr. Munter noted that preparers and auditors did not always apply the same rigor and attention to the statement of cash flows as they did to other financial statements. Accordingly, he reminded preparers and auditors of their professional responsibilities related to the statement of cash flows.

Key takeaways from Mr. Munter’s statement include the following:

• To mitigate the risk of restatements, it is critical for issuers and auditors to perform an objective materiality analysis of “both the financial statement and ICFR impacts [footnote omitted] of an error in the statement of cash flows, including the significance of the statement of cash flows to the investor’s complete understanding of the financial condition of the company.”
• With respect to disclosures related to the statement of cash flows, issuers should “focus on investor needs when determining how best to communicate relevant cash and noncash information.”
• It is essential to have “appropriate risk assessment processes and controls in place to facilitate risk identification, analysis, and response related to the preparation and presentation of the statement of cash flows.”

Access the statement on SEC’s website.

Williams discussed the need for updating standards, citing proposals and changes made by the PCAOB. She outlined efforts to address issues such as noncompliance and emphasized the importance of public comments in shaping standards. She also discussed PCAOB's enforcement actions, including sanctions and penalties, to ensure accountability and protect investors.

Williams encouraged firms to focus on quality control and remediation for improved audit quality and concluded by emphasizing the crucial role auditors play in fostering confidence in the financial system and protecting investors.

Access the speech on the PCAOB website

These amendments are intended to strengthen and modernize the requirements for the confirmation process by describing principles-based requirements for all methods of confirmation, including paper-based and electronic means of communications.

According to PCAOB’s Chair Erica Williams’s, “the new standard, which replaces a standard that had not been significantly updated in twenty years, is also a big step forward as the Board continues to execute its strategic goal of modernizing PCAOB standards.”

Access the order on SEC’s website.